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New resource shows Eskay Creek potential

Substantial gold-silver before adding 2018 Skeena drilling North of 60 Mining News – September 21, 2018

When Skeena Resources Ltd. acquired Eskay Creek from Barrick Gold Corp. in 2017, the exploration company believed this historic mine property hosted significant quantities of gold and silver mineralization that fell below the cut-off grade for previous mining but may be considered economically viable ore today.

A new resource calculated for Skeena backs up this theory.

According to the calculation published on Sept. 17, Eskay Creek hosts 1.09 million metric tons of open-pit indicated resource averaging 4.9 grams per metric ton (173,000 ounces) gold and 72 g/t (2.53 million oz) silver; plus 4.26 million metric tons of open-pit inferred resource averaging 4.3 g/t (458,000 oz) gold and 72 g/t (9.81 million oz) silver.

Additionally, the past producing property hosts 2.51 million metric tons of underground indicated resource averaging 7.2 g/t (582,000 oz) gold and 215 g/t (17.34 million oz) silver; plus 812,000 metric tons of underground inferred resource averaging 7.2 g/t (187,000 oz) gold and 214 g/t (5.59 million oz) silver.

"This initial resource estimate validates our thesis that there are substantial amounts of potentially economic mineralization left at Eskay Creek below the cut-off grades used by historical operators of the mine," said Skeena Resources President and CEO Walter Coles.

While volcanogenic massive sulfide mineralization at Eskay Creek is particularly precious metals enriched, it also carries significant zinc, copper and antimony.

"As this resource estimate has been optimized for gold and silver, future resource estimates will also include base metal credits. In addition, we believe the property has exciting exploration upside for both precious and base metals at depth," Coles added.

This upside is being explored by a drill program currently underway.

Expanding the resource

Discovered in 1988, the historic Eskay Creek mine produced roughly 3.3 million ounces of gold and 160 million oz of silver at average grades of 45 g/t gold and 2,224 g/t silver between 1994 and 2008, which made it the world's highest-grade gold mine and fifth-largest silver mine by volume.

Skeena, which had already acquired the past producing Snip gold mine property from Barrick Gold Corp., acquired Eskay Creek from the global gold miner toward the end of 2017.

To acquire Barrick's ownership of Eskay Creek, Skeena agreed to: invest C$3.5 million in exploration on the property over the next three years; pay Barrick C$10 million once the exploration requirement has been met, all regulatory approvals have been received, and all permit transfers and underlying agreement consents have been obtained; and reimburse Barrick for reclamation expenditures incurred during the option period and assume the bond amount on the property, up to a maximum amount of C$7.7 million.

Anything over the C$7.7 million in reclamation and bond costs would be subtracted from the C$10 million purchase price.

Skeena is not wasting any time on meeting its exploration requirements at Eskay Creek.

In August, the junior began a 5,000-meter drill program focused on increasing drill density in select areas of mineralization to allow for future mine planning at Eskay Creek; collecting fresh material for preliminary metallurgical testing; and expanding known mineralization into areas never before drilled.

The multifaceted program is being carried out in the historically drill defined 21A, 21C and 22 zones.

Highlights from the first three hole are 34 meters of 15.97 g/t gold and 149.2 g/t silver, or 18.1 g/t gold-equivalent in hole SK-18-001; 34.85 meters of 20.31 g/t gold and 137.3 g/t silver, or 22.27 g/t gold-equivalent in SK-18-02; and 27.7 meters of 29.49 g/t gold and 973 g/t silver, or 27.7 g/t gold-equivalent in SK-18-003.

These holes were drilled in the 21A Zone, which is adjacent to the previously mined 22B Zone at Eskay Creek.

''These first results confirm the extremely high-grade gold-silver mineralization hosted in the undeveloped 21A Zone," said Skeena Vice President of Exploration Paul Geddes.

Being close to surface, the one- to 80-meter-thick zone of high-grade gold and silver mineralization at 21A may be amenable to open-pit mining.

In addition to gold and silver, drills have tapped what appears to be significant antimony in 21A.

Hole SK-18-003 intersected a zone of massive stibnite (antimony) with abundant millimeter-scale flecks of electrum (a silver-gold alloy) that returned 95.1 g/t gold and 14,591.5 g/t (469.1 oz/t) silver, or 303.55 g/t gold-equivalent over 0.60 meters.

During previous mining at Eskay Creek, antimony was treated as a penalty element. Skeena, however, believes this mineral, which is considered critical in the United States, could offer significant by-product credits during future mining.

Assays from the antimony and base metals are pending.

Barrick has a back-in right to purchase a 51 percent interest in Eskay Creek for a 12-month period following Skeena's completion of an NI 43-101 resource of at least 1.5 million oz gold-equivalent. To exercise the back-in right, Barrick will pay Skeena up to three times its cumulative expense on the property.

Author Bio

Shane Lasley, Publisher

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Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.


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